Determining convertible bonds and stock warrants

Assignment Help Accounting Basics

Reference no: EM13141096

For each of the unrelated transactions described below, present the entry(ies) required to record the bond transactions.

1. On August 1, 2007, Ryan Corporation called its 10% convertible bonds for conversion. The $8,000,000 par bonds were converted into 320,000 shares of $20 par common stock. On August 1, there was $700,000 of unamortized premium applicable to the bonds. The fair market value of the common stock was $20 per share. Ignore all interest payments.

2. Garnett, Inc. decides to issue convertible bonds instead of common stock. The company issues 10% convertible bonds, par $3,000,000, at 97. The investment banker indicates that if the bonds had not been convertible they would have sold at 94.

3. Lopez Company issues $5,000,000 of bonds with a coupon rate of 8%. To help the sale, detachable stock warrants are issued at the rate of ten warrants for each $1,000 bond sold. It is estimated that the value of the bonds without the warrants is $4,935,000 and the value of the warrants is $315,000. The bonds with the warrants sold at 101.

Reference no: EM13141096

Questions Cloud

Determining income tax return : Alice Johnson, Social Security number 222-23-3334, is a single taxpayer and is employed as a secretary by State University of Florida. She has the following items pertaining to her income tax return for the current year:

Does the agar have an antibiotic beyond zone of inhibition : does the agar have an antibiotic beyond the zone of inhibition? how does your answer tie in with MIC?

Problem regarding lease or buy the pcs : Discuss the implication's related to the CFO's desire to keep the transaction "off" the balance sheet. Base on the information presented make a recommendation as to whether AMG should lease or buy the PCs.

Design a procedure that would make it quantitative : using a volumetric loop is a semiquanitive technique. why is it not quantitative? Design a procedure that would make it quantitative.

Determining convertible bonds and stock warrants : For each of the unrelated transactions described below, present the entry(ies) required to record the bond transactions.

Define j-k flip flop circuit design : This solution shows how to work from a given circuit implementation (a J-K flip flop circuit design) to derive the Boolean Logic and in so doing so simplify such logic using Boolean Algebra rules

What is the percent yield : a student produces 2.73 g of a compound. She calculates the theoretical yield as 3.40 g. What is the percent yield

Laplace transforms enable interpretation and manipulation : Laplace transforms enable interpretation and manipulation of different signals by viewing these signals as either time domain signals/pulse or else frequency domain representations

Reason for allocating service department costs : Which of the following is the least praticial reason for allocating service department costs to user departments?

User Account

All Pages